cameroon gce advanced level 2025 corporate accounting 3

SECTION A: THE VALUE ADDED TAX (VAT)

2

You are a Student – Accounting Technician on internship with Paradise Plc, P.O. Box 7890, Limbe, Bota, Limbe 1 Council, with a taxpayer’s number M112167980034H. This company is registered with the Limbe Medium-sized Taxpayers’ office and was classified under the actual earning system. This company deals with taxable transactions only.

For the month of May 2024, the following transactions are extracted from the books of Paradise Plc (Figures are VAT exclusive and in CFAF):

Sales daybook

Local sale of goods 80,000,000

Income from local services rendered 8,240,000

Sales of goods to Namibia 30,000,000

Purchase daybook

Local purchase of goods 50,000,000

Payment for local services 3,090,000

Purchase of goods from abroad 20,000,000

Required:

1. Which month and year was Paradise Plc created? (2 Marks)
2. Calculate the VAT liability for the month of May 2025 (APPENDIX 1) (12 Marks)
3. Journalise the VAT declaration and payment, knowing that VAT due was paid on the deadline by bank cheque (10 Marks)
4. Complete the VAT return form for the month of May 2025 (APPENDIX 2) (16 Marks)

   (Total: 40 Marks)

SECTION B: COMPANY TAX

DAMSARRA Plc was created on the 18th of April 2023. It registered with the Yaounde MTO and was classified under the actual earning system with Taxpayer’s Identification Number (TIN) of M042318461990Q. This company is a manufacturing company.

For purpose of company tax computation, you are given the following information extracted from the statement of comprehensive income for the year ended 31/12/2024:

• Turnover for the year 2024 stood at 790,000,000 CFAF (VAT exclusive)

• Accounting profit before company tax: 475,360,085 CFAF

In making a tax analysis of the financial statements submitted for purpose of company tax computation for the year ending 31/12/2024, the following were noted:

a) The company bought raw materials from a supplier worth 24,000,000 CFAF with the assistance of a purchase agent. This purchase agent was paid a commission of 378,950 CFAF.

b) For the financial year ended, the company charged a depreciation of 2,014,900 CFAF for an office furniture that was bought on the 01/04/2024 for 12,000,000 CFAF, with a useful life of five years and depreciated using the straight-line method.

c) For the year ended 31/12/2023, the company carried forward a depreciation of 4,210,000 CFAF because it made a fiscal loss

d) The accountant of the company was not aware of a tax exempted income of 8,035,000 CFAF.

e) DAMSARRA Plc paid a tax penalty of 2,445,000 CFAF for the late declaration of VAT liability for August 2024.

f) This company donated computers and other gadgets worth 4,450,900 CFAF to some schools in the North West Region to support the state’s policy of digitalisation

g) This company received and recorded dividends from ABCG Ltd at a net value of 4,175,000 CFAF

h) The company reported a fiscal deficit of 3,800,000 CFAF in 2023 and 2,045,000 CFAF for the year 2022.

Required

5) Give the full meaning of MTO as used in above (1 Mark)

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